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Fan Yang

Advanced Micro Devices (AMD) Falls Back Towards Key Support; Buy the Dip?

It's been a rough go these last 2 weeks for the stock market. Advanced Micro Devices $AMD is getting hit up harder than the benchmark averages. After giving up more than 15% in the past 2 weeks, AMD is now trading around $10 a share, and is approaching a key support area around $9.50.

AMD Daily Chart

(click to enlarge)

- As we can see on the daily chart, AMD has been in consolidation since early 2017 with price peaked at $15.50 a share.
- Note that price action was bullish in 2016. 
- Because the prevailing trend was bullish, we should respect the common support in the 9.40-9.88 area. 
- But if general market conditions are bearish, don't be surprised if price falls below $9.40. In this scenario, we should anticipate downside towards $7.90-$8.00 area. 
- Support around $9.50 would be a sideways range consolidation scenario.
- Support around $8.00 would be a falling channel correction scenario.
- Both are within the context of a long-term bullish trend. 
- Therefore, we should anticipate some further bearish action in the short-term, but treat AMD as a buy-on-the-dip candidate.

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